US New and Existing Home Sales, Prices, Inventory: July 2017

According to the US Census Bureau and the US Department of Housing and Urban Development Wednesday, sales of new single-family homes in the US fell 9.4 per cent over the month of July to a seasonally adjusted annual rate of 571,000. Despite the declines, sales over the first seven months of 2017 are 9.2 per cent above their level over the same period in 2016.

US HOME SALES, HOUSE PRICES, ARCHITECTURE BILLINGS: 2017

Despite gains in the US West and South, existing home sales fell for a second consecutive month, declining 1.3 per cent in July, but remained 2.1 per cent above the pace a year ago, the National Association of Realtors reported Thursday. Some 51 per cent of homes sold last month were on the market less than a month as buyers overcame low inventory and higher prices. July inventory declined 1 per cent, and is now 9 per cent lower than a year ago, having fallen year-over-year for the 26th consecutive month. NAR reported that at the current sales rate, the July unsold inventory represents a 4.2-month supply, down from a 4.8-month supply a year ago. July existing sales reached a seasonally adjusted rate of 5.44 million units.

While new home sales in the US fell in July, year- to-date, the number of new home sales is 9.2 per cent ahead of its pace over the same period in 2016. In addition, each region recorded sales over the January-to-July 2017 period that exceeds sales over the same period in 2016. In the Northeast, year-to-date sales are 16.1 per cent ahead of their pace over the same period last year, followed by the West (14.6 per cent), the South (6.8 per cent) and the Midwest (5.8 per cent).

The months’ supply of new homes rose 11.5 per cent over the month to 5.8 months. However, this increase largely reflects a decrease in the sales pace, from 630,000 to 571,000. Meanwhile, the number of new homes for sale in July, 276,000, was 1.5 per cent above its level in June. Over the past year, inventory has shown signs of improving as the sales pace fell 8.9 per cent, but the number of new homes for sale rose by 16.5 per cent. Nevertheless, months’ supply remains below the 6.0 month-benchmark for a healthy housing inventory.

The median sales price of a new home rose 0.67 per cent over the month to US$313,700. Since sales fell, the increase in the median sales price likely reflect changes in the composition of new homes sold. Over the month, the proportion of sales of new homes priced under US$300,000 fell 1 per cent to 47 per cent while sales of new homes priced above $300,000 rose 1 per cent to 53 per cent.

Existing Home Sales

Existing homes stayed on the market for 30 days in July, up slightly from 28 days in June, but down from 36 days in July 2016. The July first-time home buyer share was 33 per cent, up from 32 per cent in June and a year ago.

The July median sales price fell from US$263,300 last month to US$258,300, but was up 6.2 per cent from last year, representing the 65th consecutive month of year-over-year increases. The July median condominium/co-op price fell from US$246,000 last month to US$239,800, but was up 5.3 per cent from a year ago.

Architecture Billings Index

For the sixth consecutive month, architecture firms reported increasing demand for design services as reflected in the July Architecture Billings Index (ABI). As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lead time between architecture billings and construction spending. The American Institute of Architects Wednesday reported the July ABI score was 51.9, down from a score of 54.2 in the previous month. This score still reflects an increase in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 59.5, up from a reading of 58.6 the previous month, while the new design contracts index increased from 53.7 to 56.4.

According to the AIA, there is an “approximate nine to twelve month lag time between architecture billings and construction spending” on non-residential construction. This index was positive in 9 of the last 12 months, suggesting a further increase in new Commercial Real Estate investment in 2017 and early 2018.